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A-B-Cs Of Outsourcing Success

Carnegie Mellon's Framework helps companies assess service providers.

By Larry Greenemeier
InformationWeek
December 10, 2001 12:00 AM (From the December 10, 2001 issue)

Carnegie Mellon University's School of Computer Science recently published a Cliff Notes-like guide to IT outsourcing. The university unveiled its eServices Capability Model, a framework for assessing service providers and a collection of industry best practices.

Carnegie Mellon developed the model using its own research and the expertise of service providers such as Accenture and Satyam Computer Services Ltd. The model should provide companies with information to help them succeed in outsourcing relationships. Dun and Bradstreet's Barometer Of Global Outsourcing study indicates that as many as 25% of all outsourcing relationships fail because the client doesn't clearly communicate its needs, costs exceed expectations, and quality of service is poor.

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The eServices Capability Model is divided into five organizational elements

Organization: Define and communicate corporate objectives

People: Identify needed competencies

Business operations: Set procedures for picking subcontractors and vendors

Technology: Track infrastructure changes

Knowledge management: Identify and collect performance metrics

Data: Carnegie Mellon

The increasing prevalence and complexity of outsourcing contracts make best practices particularly relevant. "The outsourcing market is exploding, but as companies consider it for the first time, they realize they don't know much about the process," says Michael F. Collins, an Accenture outsourcing practice partner.

First-time outsourcers often have no way to determine the competence of a particular service provider outside of customer references, says Jane Siegel, director of CMU's IT Services Qualification Center. Siegel's team looked at a number of best practices such as the software capability maturity model, which governs application development. when developing the parameters for the eServices model.

The first step to ensuring that a client has reliable service levels and that its service provider meets those service levels is for the client to have knowledge of the contract-negotiation process. "The eServices Capability Model helps clients assess whether or not their service provider will pass muster," says Collins.

The model can be downloaded free from itsqc.srv.cs.cmu.edu.